Einhorn recently filed — then dropped — a lawsuit against Apple; Einhorn wants Apple to create a preferred stock that pays a dividend in perpetuity.

"I would ignore him," Buffet said. "I would run the business in such a manner as to create the most value over the next five to 10 years. You can't run a business to push the stock price up on a daily basis. Berkshire has gone down 50 percent four times in its history. When that happens, if you've got money you buy it. You just keep working on building the value."

In other words, Cook should use Apple's massive pile of cash to buy back stock. He said he told Steve Jobs to do this, but Jobs didn't take the advice.

"I did talk with Steve Jobs a few years ago about what they might do with the cash. The best thing you can do with a business is run it well, and the shares will respond," Buffet said.

"When Steve called me, I said, 'Is your stock cheap?' He said, 'yes.' I said, 'Do you have more cash than you need?' He said, 'a little.' [laughs] I said, 'then buy back your stock.' He didn't ... But if you could buy dollar bills for 80 cents, it's a very good thing to do."

Now Watch: Apple's Answer To The Google Glasses Is Past The Experimental Stage